A CONTROVERSIAL proposal for a pay-as-you-go road toll scheme on roads across Britain which could see drivers pay as much as £1.30 a mile has sparked outrage.

The Institute for Public Policy Research has recommended that the "Big Brother"-style congestion charging be introduced to fight pollution and traffic gridlock.

The think-tank, which has close links with the Government, said today any other measures would only lead to more pollution and congestion.

But the proposal could see drivers pay an extra £16 billion by 2010 to drive on all roads and motorways.

Today, motoring groups demanded cash raised from road tolls be handed back to drivers in the form of tax cuts. A spokesman for the AA said: "Only the wealthy could afford to drive and we would end up in a permanent recession.

Brian Gregory, chairman of the Association of British Drivers, said: "This is just another tax on mobility when we have one already - fuel duty.

"These tolls would heap further cost on drivers, but is doubtful the cash raised would be ploughed back into the roads."

Ministers are investigating whether road tolls could be introduced elsewhere in Britain in the wake of the successful scheme in London. Backers of the London measures claim the congestion charging has reduced rush-hour traffic and allowed faster bus travel.

Surveys suggest most drivers would accept a new mileage-based charge so long as Chancellor Gordon Brown cuts vehicle excise duty and fuel tax.

But the IPPR warned today the cuts would lead to more pollution and congestion in the countryside and has instead proposed scrapping vehicle excise duty altogether, keeping fuel tax at current levels and introducing road pricing.

The group estimates the measures would generate an extra £11.5 billion a year for transport infrastructure. It would make the cost of owning and running a car cheaper for low mileage users but more expensive for everyone else.